Updated 12.30pm with Em@ney statement

A payments services provider has been ordered to stop taking on new clients as its operations come under scrutiny from the financial regulator.

Em@ney, a Ta’ Xbiex digital payments provider, hit the headlines this month after Times of Malta reported how its clients were unable to access their funds for “several days” without explanation.

In directives published last week, the Malta Financial Services Authority (MFSA) ordered Em@ney to stop taking on new clients until it ensures that the “proper governance and internal controls” are in place to operate its payments services licence in accordance with the law. Em@ney has also been ordered to process client transactions in a “timely and efficient manner” after carrying out the necessary anti-money laundering checks.

The company is to report weekly to the MFSA on the status of client transactions being processed. The regulator said Em@ney must ensure that any decisions taken are done by individuals authorised by the MFSA to act on its behalf.

A company spokesperson has blamed the delays in processing client transactions on “technical difficulties” with its IT systems caused by a change in management.

The former chief executive officer and board of directors have, however, pushed back at the claims.

In a joint statement last week, the company’s former CEO, Germano Arnò, and former board directors said they “bear no responsibility for the recent decisions made by the new management of Em@ney”.

Since the handover occurred, “the former board no longer has any influence over the company’s operations”, they continued, before “entirely” attributing the suspension of banking services to the new management.

Company fined €360k three years ago

“Despite his [Arnò’s] attempts to offer support, the new leadership chose to make sudden changes to the platform and discontinue services built over years of hard work and perseverance,” the statement read.

Three years ago, the company was fined €360,000 by the Financial Intelligence Analysis Unit (FIAU) for a series of anti-money laundering breaches concerning clients involved in passport sales, cryptocurrency and with potential links to organised crime.

The fine has been appealed by Em@ney.

Cannabis associations have been hard hit by Em@ney’s problems, with many of them using the payment provider’s services.

Association owners also report being given different explanations for the outages; one said they had been attributed to a change in company director, while another said the company had told him they were undergoing a “periodic review” by the FIAU, during which time account services would be unavailable.

Em@ney: We are complying fully with the regulator

In a statement, Em@ney said it was complying fully with the regulator's order not to take on new clients. 

The company said it was currently in the process of re-onboarding all its existing clients, in like with Know Your Client and due diligence requirements. 

The re-onboarding is necessary because the company "lost access to critical banking IT systems and data" as a result of an "uncooperative" provider, it said. 

All clients who have been re-onboarded can use its SEPA transfer system, it said. 

 Em@ney insisted it had followed all necessary procedures in terminating its previous CEO, including informing the MFSA and Malta Business Registry. 

It denied claims that 3,000 Italian clients lost access to their funds, saying the company has around 1,000 clients in total, with 40 per cent of those being Italian. 

No clients are being left without assistance, it said, with a dedicated team focused on client cases.